Suppose that you took out a student loan at a rate of 4.45%. Note that this rate is constant for the life of the loan. Next,

suppose that at your first job after graduation, there are two possibilities: (i) the inflation rate is 2%, and your wages rise by

4% or (ii) the inflation rate is 3%, and your wages rise by 5%. (No, you certainly do not get a choice of inflation rates, but

pretend that you can for the sake of exploring this important concept.) Briefly explain whether you would prefer the first or

the second situation